The first quarter of 2026 was not a good one for farmers and ranchers at the farm gate. The Federal Reserve Bank of Minneapolis conducts a survey of ag lenders in the region each quarter. Joe Mahon, Regional Outreach director, says 76 percent of lenders reported farm income down from this time last year.
“A continued downward pressure on incomes a little bit better on the income side than we’ve seen in some recent quarters, but actually still firmly in negative territory, and after a kind of a bump at the end of 2025 in the fourth quarter, we kind of saw them turn back downward again.”
Mahon says another unhappy bit of news is that interest rates have started to tick back up.
“We had been seeing over the last couple of years some easing in interest rates that seems to have petered out over the last quarter. So interest rates kind of either moved sideways or up slightly on farm loans, in spite of that increased demand for farm loans, and that’s because of that tighter cash picture, and then a downturn in repayment rates on those loans as well. That’s kind of that credit quality piece.”
Not surprisingly, demand for loans is also on the rise.
“Nearly half of the lenders we surveyed told us that loan demand increased over the last quarter. Only about 13% told us that that loan demand decreased. Repayment rates: nearly half of them told us that the rate of repayment on farm loans went down.”
Mahon points out that is not necessarily an indicator of delinquency as it could also include early repayment.